ML19326D452
| ML19326D452 | |
| Person / Time | |
|---|---|
| Site: | Midland |
| Issue date: | 08/18/1975 |
| From: | CONSUMERS ENERGY CO. (FORMERLY CONSUMERS POWER CO.) |
| To: | |
| Shared Package | |
| ML19326D448 | List: |
| References | |
| NUDOCS 8006110479 | |
| Download: ML19326D452 (56) | |
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CONSUMERS POWER COMPANY Quarterly Report for the Second Quarter of 1975 Item 1 of the September 13, 1974 Request "Significant changes in Consumers Power Company's financial status, including operating costs, construction costs, and revenues."
Response
Information relating to this item is contained in the Company's STATDENT OF INCOME AIO RETAINED EARNINGS and BAIANCE SHEET for the twelve months ended June 30, 1975 and the NOTES TO FINANCIAL STATDEITfS. Copies of these documents are attached hereto as Appendix A.
Item 2 of the September 13, 1974 Request
" Progress reports on new capital raised and all rate increases granted your company."
Response
With respect to new capital raised, on June 5, 1975, Consumers Power Company issued and sold 1,000,000 shares of its $5 50 Preference Stock, C11mlative, Convertible, $1 par value, realizing
$47,500,000 after underwriting commissions. In addition, on June 25, 1975, Consumers Power Company sold to, and leased from, Trustees of General Electric Pension Trust ("GEPT"), Stamford, Connecticut, two office buildings, one of which is located at Jackson, Michigan, and the other being located near Jackson, Michigan, together with related land. The property at Jackson, Michigan consists of approximately 5 acres of land, including an 11-story office building, in which the Company's general offices 80 06110 f
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, 2 are located. The other property near Jackson, Michigan consists of approximately 23 acres of land, including a 6-story office building. The Company received in payment for the properties, cash totaling $25,953,070 after deducting rent for the interim term from June 25, 1975 through June 30, 1975, amounting to
$46,930. The Company leased the properties from GEPT for a *,erm of 28 years. Upon expiration of the 28-year lease, the Company will have three 5-year renewal options, and will have the option to purchase the properties at their appraised value at the end of the basic term or any renewal term.
With respect to rate increases, on June 2,1975, the Michigan Public Service Commission ("MPSC") granted interim rate relief to Consumers Power Company in the amount of $29,194,000. This order was issued regarding the Company's pending application for authority to increase its rates for.he sale of gas, MPSC Case No. U-4717. The rate relief order became effective on June 3, 1975 A c'opy of this order is attached hereto as Appendix B.
Item 3 of the September 13, 1974 Request
" Construction expenditures and sources of construction funds on a quarterly basis during the calendar year 1975."
Response-Information relating to this item is contained in the STATEMDiT OF SOURCE OF FUNDS FOR GROSS PROPERTY ADDITIONS for 1
the three months ended June 30, 1975 A copy of this document is attached hereto as Appendix C.
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.~ 3 Remainder of the September 13, 1974 Request "In addition you should notify us of any changes in Consumers Power Company's quality control and quality assurance activities associated with the construction of the Midland Plant."
Response
During the second quarter of 1975, Consumers Power Company's quality control and quality assurance activit$es remained unchanged.
As previously reported by the Company on March 17 and May 19, 1975, the curtailment of construction activities at the Midland Plant has caused Bechtel to make various manpower adjustments.
Such manpower adjustments will not detract from the quality or scope of the QC or QA effort at Midland.
One significant personnel change has occurred within Consumers Power recently which, while not occurring during the second quarter of 1975, should be reported at this time.
G. S. Keeley, former Director of Project Quality Assurance Services, has been named Midland Project Manager, replacing W. E. Kessler.
F. M. Southworth, former Region Superintendent, has been named the new Director of Project Quality Assurance Services. These personnel changes became effective August 1, 1975
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Appendix A-1 CONSUMERS POWER COMPANY STATEMENT OF INCOME AND RETAINED EARNDUS FO!1 THE WELVE MON 111S ENDED JUNE 30, 1975 OPERATING REVENUE:
(Notes 1 & 2)
Eleetric
$ 721,194,938 Gas 560,231,953 Steam 1,848,607 Total operating revenue
$1,263,275,496 OPERATING EXPENSES AND TAXES:
Operation -
Purchased and interchange power
$ 128,651,598 Fuel used in electric generation 234,776,017 Cost of gas sold 363,380,501 Other 161,141,622 Total operation
$ 667,949,736 Maintenance 58,697,119 Depreciation and amortization 86,427,259 General taxes 64,557,982 Income taxes (Note 11) 40,076,553 Total operating expenses and taxes
$1,137,706,651 Net operating income
$ 145,566,647 OTHER INCOME:
Allowance for funds used during construction (Notes 1 & 12) 24,650,770 Income from subsidiaries (Notes 1 & 13) 8,487,106 Other 3,686,529 Net other income 36,624,405 INTEREST CHARGES:
Interest on long-term debt 93,817,800 Interest on notes payable 9,700,637 Other 424,692 Total interest charges 8 103,943,129 Net income S
78,448,123 DIVIDENDS ON HIEFERRED AND PREFERENCE STOCK 27,589,620 Net income after dividends on preferred and preference stock 50,858,503 DIVIDENDS ON COMMON STOCK - DECIARED DURDU THE PERIOD AT THE RATE OF 50.Of PER SHARE PER QUARTER 39,418,125 Balance to retained earnings 11,440,378 Add -
Retained earnings June 30, 1974 as reported 219,188,006 Restatement for income tax effect of gain on reacquisition of long-term debt prior to June 30, 1974 (Note 14) 4,038,993 Restatement for unbilled revenue at June 30, 1974 (Note 2) 17,636,681 RETAINED EARNINGS - June 30, 1975 (see balance sheet)
$ 252.304.058 The accompanying notes are an integral part of this statement.
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- A-2 CONSS O S FN ER COMPANY RATANCF SHEET JUNE 30, 1975 S T O C K H 0 L D E R S' INVESTMEN7 ASSETS AND LIABILTTTES IffILITY PIANT:
CAPITALIZATION:
At original cost -
Commeon stockholders' equity -
Plant in service and held for future use -
Common stock - $10 par value, authorized 32,500,000 Electric
$1,982,920,099 shares, outstanding 26,558,366 (Notes b & 6)
$ 265,583,66 }
Oas 973,856,215 Capital in excess of par value (Note 6) 2b8,261,666 Steam 3,303,584 Comanon to all departments 72,519,7(I)
Retained earnings (Note 5) 252,30b,058
$3,032,599,064 4 7bb,149,354 Isse Provision for accrued depreciation 744,567,737 Insas Capital stock expense 11, hob,440
$2,250,031,927 Construction work in progress (Notes 3 & b) 5bb,b72,452
$2,532,504,379 Preferred stock, cissulative, $100 par value, authorized 5,000,000 shares (Notes 4 & 6) 346,733,800 (yn!ER PffYSICAL Mt0ITRTT:
Preference stock, cumulative, $1 par value, authorized At cost or less 3,453,017 5,000,000 aheres, outstanding 1,518,868 (Note 6) 1,$18,868 Iess: Accumulated provision for accrued depreciation Capital in excesa of par value of preference stock 7b b24.532 and amortization (187,%6)
Total stockholders' investment
$1,177,422,144 3,265,661 Iong-tem debt (Notes b & 7) 1,258,362,473 ed subsidiaries Total capitalization
$2,435,784,617 Michigan Gas Storage Company (Note 1) 20,728,301 Northern Michigan Exploration Company (Notes 1 & 13) 25,232,059 Other, at cost or less CtRRErr OBLICATIONS EXITCTED TO BE REFINANCED (Note 4)
Notes payable, due within one year (average interest rate of 9 5%)
35,400,000 First mortgage bonds, 2 7 85 series due 1975 86,324,000 First mortgage bonds, 8-3 b5 series due 1976 60,000,00
)
CURRENT ASSETS:
I Idl=724,00(
Cash (Note 5)
$ 24,658,547 Accrued utility revenue (Note 2) 39,295,2m CURRENT !.IABILITIES: (Excluding notes payable, due uithin one year)
Accounts receivable - less reserve of $1,0c6,547 74,976,498 Current maturities and sinking fund - long-term debt (Note 7) 6.175,k26 Refundable incorne taxes (Note 11) 17,650, % 3 Bankers acceptance drafts 20,000,000 Materials and supplies, at everage cost Accounts payable (includes $2,938,k50 due to subsidiaries) 46,485,101 Fuel stock 57,839,122 Dividende declared 7,177,b52 Other 33,758,081 Accrued taxes 118,865.880 Cas in underground storage, at average cost
$7,16$,215 Accrued interest 27,909,424 Property taxes - future period net 14,b28,146 Other 44,850,431 Prepsyment and other b,598,642
$ 271,463,714 5 324,370,016 DEFERRED CREDITS AND RESERVES Preliminary construction costs of cancelled projects Deferred income taxes Note 11)
$ 21b,807,330 being amortized (Note 3) 5,814,510 Investment tax credit Note 11) 58,489,363 Other deferred debits (16,070,b12)
Other (Note 9) 34,716,515
$ (10,255,90e )
$ 32,013,2 M
$3,1%,@5.539
$3,196,985.539
'Ite secompanying notes are an integral part of this statement.
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A-3 Pagn 1 of 11 NOTES TO FINANCIAL STATEMENTS (1) SIGNIFICANT ACCOUNTIIU POLICIES Effective January 1, 1973, the Company adopted the equity method of accounting for the investment in its wholly-owned subsidiaries, Michigan Gas Storage Company and Northern Michigan Exploration Company, pursuant to Federal Power Commission Order No 469 Under this method of accounting the Company's interest in the earnings of the subsidi-aries is reflected currently in earnings and in the carrying value of the investments.
The Company provides depreciation on the basis of straight-line rates approved by the Michigan Public Service Commission (MPSC). Composite depreciation rates were approximately 2.76% for electric property and 3.42% for gas property for the 12 months ended June 30, 1975.
Effective January 1, 1974, the Company changed its method of accounting to accrue revenues for service rendered but not billed at month-end.
Prior to January 1, 1974, operating revenue was recognized at the time of monthly billings on a cycle basis.
(See Note 2.)
The Company makes annual contributions to the pension plan sufficient to cover current service costs, interest on unfunded prior service costs and amortization of prior service costs.
(See Note 10.)
Allowance for funds used during construction, included in other income, represents the estimated cost of funds applicable to utility plant in process of construction capitalized as a component of the cost of utility plant. Under established regulatory practices, the Company is permitted to earn a return on the capitalized cost of such funds and to recover the same in the rates charged for utility services.
(See Note 12.)
(2) CHANGE IN ACCOUNTING METHOD Prior to 1974, the Company followed the policy of not recording revenues relating to service rendered but not billed at the end of the accounting period since the changes in such unrecorded amounts from year to year were generally not significant. Due to increases in costs and rate levels, the disparity between costs and revenues as a result of this method of accounting has increased. Accordingly, effective January 1, 1974, the Company changed to a preferable method of accounting to accrue the amount of unbilled revenues for services provided to the month end to more closely match costs and revenues.
The cumulative effect of the change on periods prior to the twelve months ended June 30, 1975 amounted to $17,636,680 after income taxes.
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NOTES To FINANCIAL STATEMENTS (Contd)
(3) NUCLEAR GENERATING PIANTS The Palisades Nuclear Plant was shut down in August 1973 for repairs. In october 1974, the Plant resumed limited operation pursuant to a 90-day authorization to carry out a program to remove chemical impurities from the Plant's steam generators. While such program was being conducted, j
other operating problems required further shutdown to permit repairs.
on April 2, 1975, the Palisades Plant was returned to operation pursu-ant to an authorization to operate for 90 effective full-power days after which the Plant is to be shut down for steam generator tube in-spection. Except for relatively short shutdowns for repairs, the Plant has operated at various power levels since that time, and as of August 1, 1975 was operating at approximately 60% of thermal capacity. At the lat-ter power level, the authorization is estimated to expire in late September 1975.
In August 1974, the Company filed suit in the US District Court for the Western District of Michigan seeking not less than $300 minion in past and future damages, together with equitable relief from suppliers of components in design work for the Plant. The suit is still pending.
Construction work in progress includes $237,353,000 at June 30, 1975 re-lated to the Midland Nuclear Plant. The issuance of construction per-mits by the Atomic Energy Commission (AEC), now Nucler.r Regulatory Commission (NRC), in December 1972 was upheld by an Appeal Board of the AEC in May 1973 but has been appealed to the US Court of Appeals for the District of Columbia Circuit. Construction, delayed since 1970, was resumed in June 1973 In December 1973, the AEC issued an order for the Company to show cause why all construction activity should not be suspended pending a showing that the Company is in com-pliance with the AEC's quality assurance regulations and that there is reasonable assurance that such compliance will continue throughout the construction process. Following hearings, an Atomic Safety and Licens-ing Board of the AEC on September 25, 1974 determined the issues favor-ably to the Company's position. Certain intervenors have appealed the initial decision but failed to file a legal brief in support of the appeal. Accordingly, in May 1975 an Atomic Safety and Licensing Appeal Board dismissed the appeal but retained jurisdiction of the matter, on its own motion, to review the initial decision. The matter is pending.
The Company has canceled plans to construct a two-unit, 2,300 megawatt nuclear power plant near Quanicassee, Michigan, which was scheduled for commercial operation in 1983 and 1985 The decision to cancel the
$1.4 billion project was based upon the currently prevailing market conditions for utility securities, the Company's inadequate earnings, and the need for raising capital for other construction projects during the lengthy construction period required to build the Quanicassee Plant.
(See Note 4.) Total costs (excluding land costs and expenditures which may have value in connection with the future use of the site for a gen-erating plant) consisting of engineering, licensing expenses and other l
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NOTES TO FINANCIAL STATEMENTS (Contd) preliminary work having no salvageable value and cancellation charges l
amount to approximately $12,600,000.
The Company has been authorized by the Michigan Public Service Commission to amortize such costs net of related income taxes to operations over a period of ten years.
(4) CONSTRUCTION PROGRAM AND FINANCING RESTRICTIONS Difficulty in financing the Company's planned construction program, new estimates of increased costs, and a reduction in projected load growth have forced the Company to substantially reduce its five-year construc-tion program. After giving effect to reductions in the construction program, capital expenditures in 1975 are currently estimated to total
$249 minion and total construction expenditures through 1979 are pres-ently estimated to approximate $2.4 billion. The reduction in the Company's planned construction program has resulted in the cancella-tion of the Quanicassee Nuclear Plant as discussed in Note 3 and the curtailment of construction activity at other electric generating plants which will postpone their planned completion dates from one to three years. The Company expects these reductions may have an adverse effect on the adequacy and reliability of energy supplies in the future.
Substantial commitments have been made with respect to the construction program in future years.
'In order to finance the 1975 construction program and other current obli-gations expected to be refinanced of $181,724,000, it will be necessary for the Company to sell substantial additional securities, including the issuance of notes payable to banks, the amounts, timing and nature of which have not yet been detemined.
The earnings coverage provisions of the Indenture covering the Company's First Mortgage Bonds require for the issuance of additional mortgage bonds, except for certain refunding purposes, minimum earnings coverage, before incune taxes, of at least two times pro forma annual interest charges on bonds. On the basis of this formula, the pro forma coverage for the twelve months ended June 30, 1975 (computed including allow-ance for funds used during construction applicable to Electric Construc-tion, which, in the opinion of the Company's General Counsel, is properly so included) would be at least 2.20 times as compared with the require-ment of at least two times.
The Company's Charter bequires for the issuance of additional shares of Preferred Stock specified earnings coverages, including minimum earn-ings coverage, after income taxes, of at least one and one-half times the pro forma annual interest charges on all indebtedness and preferred dividend requirements. On the basis of this formula, the pro forma coverage for the twelve months ended June 30, 1975 (computed including allowance for funds used during construction applicable to Electric w,.,
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Paga 4 of 11 NOTES TO FINANCIAL STA'IEMEIT1'S (Contd)
Construction, which, in the opinion of the Company's General Counsel, is properly so included) would be at least 1.34 times as compared with the requirement of at least one and one-half times. The amounts of additional Preferred Stock which can be issued in future years will be contingent upon increases in earnings through rate increases or otherwise.
Ccmmon Stock of the Company may not be issued at less than par value pur-suant to the Michigan Business Corporation Act.
I The Company presently has arrangements with banks providing for short-term borrowings of up to $190,400,000, which are subject to periodic review. Included in the $190,400,000 is a commitment with respect to the issuance of up to $20,000,000 of Bankers Acceptances to finance coal purchases.
In connection with various of these arrangements the Company is generally required to maintain average compensating balances with the banks, over an unspecified period of time, equal to 10% of the total line of credit plus 10% of the average borrowings outstanding, as determined from the bank's records after adjustment for uncollected funds. There are no legal restrictions on the withdrawal of these funds. In addition, the Company has issued commercial paper from time to time on a short-term basis, generally for periods of less than one month.
Average short-term borrowings outstanding for the twelve months ended June 30, 1975 amounted to $101,527,000, and the weighted average in-terest rate was 9 55% excluding the effect of compensating balances.
The =av4== amount outstanding at any one time was $152,200,000.
(5) LIMITATION ON DIVIDENDS At June 30, 1975, retained earnings in the amount of $134,222,000 are not available for the payment of cash dividends on Common Stock under provisions of the Articles of Incorporation of the Company which, ex-cept under certain circumstances, prohibit T.he payment of Common Stock dividends in cash which would reduce the percentage of Common Stock equity to total capitalization below 25%. There are also other re-strictions as to payment of dividends on Common Stock which, however, l
are presently less restrictive than the limitation mentioned above.
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Paga 5 cf 11 NOTES TO FINANCIAL STATEMENTS (Contd)
(6) PREFERRED STOCK AND PREFERENCE STOCK Preferred Stock is represented by:
Redemption Price per Share June 30, 1975
$4.50 - 547,788 Shares Outstanding
$110.00
$ 54,778,800
$4.52 - 119,550 Shares Outstanding 104.725 11,955,000
$4.16 - 100,000 Shares Outstanding 103 25 10,000,000 1
$7.45 - 700,000 Shares outstanding 108.00 70,000,000
$7.72 - 700,000 Shares outstanding 108.00 70,000,000
$7.76 - 750,000 Shares outstanding 109 19 75,000,000
$7.68 - 550,000 Shares Outstanding 108.00 55,000,000
- ." Total Preferred Stock
$346.733.800 The Preferred Stock of the Company is redeemable as a whole or in part, at the option of the Company, at the above redemption prices plus accrued dividends to the date of redemption, except that prior to April 1, 1978, July 1, 1977, June 1, 1978 and November 1, 1978, the
$7.45, $7 72, $7.76 and $7.68 Preferred Stock, respectively, may not be redeemed through certain refunding operations.
The Company is required to endeavor to purchase and retire annually 4,000 shares of the $4.52 Preferred Stock at a price per share not to exceed $102.725 plus accrued dividends. Such purchases of Pre-ferred Stock resulted in a net gain of $220,000 for the 12 months ended June 30, 1975 which was credited to capital in excess of par value.
In August 1974, the Company sold 600,000 shares of $6.00 Preference Stock, convertible into Common Stock on and after November 1, 1974 at four shares of Common Stock for each share of Preference Stock.
At June 30, 1975, 2,075,472 shares of Common Stock are reserved for conversion of the $6.00 Preference Stock.
In June 1975, the Company sold 1,000,000 shares of $5 50 Preference Stock convertible into Common Stock on and after October 1975 at a conversion price of $15.50 per share (equal to approximately 3 225 shares of Common Stock for each share of Preference Stock). At June 30, 1975, 3,225,806 shares of Common Stock are reserved for conversion of the $5 50 Prefer-ence Stock.
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Paga 6 of 11 NOTES To FINANCIAL STATEMENTS (Contd)
'(7) I4NG-TERM DEET Iong-term debt at June 30, 1975 is represe M d by:
First Mortgage Bonds, secured by a mortgage and lien on substantially all property -
2-7/ 4 Series due 1975 86,324,000 8-3/h% Series due 1976 60,000,000 2-7/8% Series due 1977 24,010,000 3%-4-3/4% Series due 1981-1991 263,269,000 11-1/4 Series due 1982 50,000,000 11-3/ 4 Series due 1994 60,000,000 5-7/$-6-7/8%Seriesdue 1996-1998 247,550,000 7-1/2%-8-5/8% Series due 1999-2003 470,000,000 Total First Mortgage Bonds
$1,261,153,000 Installment Sales Contracts Payable (Net of $3,393,538 held by trustee pending completion of construction) 70,306,462 Sinking Fund Debentures, 4-5/8%, due 1994 37,000,000 Tem Bank Ioan 50,000,000 other 126,426 Unamortized Net Debt Premium 610,089 Total
$1.419.195.977 Deduct - Current Maturities and Sinking Fund -
First Mortgage Bonds 2-7/$ Series due 1975 86,324,000 8-3/ 4 Series due 1976 60,000,000 Current Sinking Fund Requirement Included in Current Liabilities 6,049,000 Reacquired Securities for Satisfaction of Sinking Fund Requirement - But Not Yet Retired 7,734,078 Sinking Fund Debentures 600,000 other 126,426
$ 160,633,504 Total Iong-Term Debt
$1.258,362.473 In July 1975, the Company sold $75,000,000 First Mortgage Bonds, 9-3/4 Series due 1980 and $75,000,000 First Mortgage Bonds,11-1/2% Series due 2000.
(8) NUCIZAR FUEL IEASE OBLIGATION The Company has executed a Nuclear Fuel Lease, dated as of November 19, 1974, whereby the Lessor has acquired a 100% undivided interest in nuclear fuel having a cost of approximately $32,094,000 which will be utilized at the Palisades Nuclear Plant. The maximum amount which can be financed under the lease is $32,500,000.
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A-9 Page 7 of 11 NOTES TO FINANCIAL STATEMENTS (Contd)
The fuel lease provides for a term ending on November 18, 1979, with pro-vision for one-year extensions from time to time to a date not later than November 19, 2029, subject to earlier termination in certain events.
The quarterly lease charges consist of a fuel factor computed on the basis of heat production plus interest costs and administrative fees and expenses incurred by the Lessor, cnd, in the event of termination of the file 1 lease, an amount equal to the Lessor's remaining investment. The Company is also responsible for payment of taxes, maintenance, operating costs, risks of loss and insurance.
(9) RATE MATIERS On January 23, 1975, the MPSC authorized an increase in the Company's electric rates of approximately $66,231,000 on an annual basis which included an interim increase of $27,624,000 authorized September 16, 1974 The Attorney General of Michigan and the UAW-CAP appealed the order of the MPSC authorizing the increase in rates to a State Court and requested the Court to restrain and enjoin the increase in elec-tric rates during the pendency of the litigation. No action has been taken by the court with respect to such request.
In November 197k, the Company submitted an application to the MPSC to in-crease its gas rates by not less than $54,157,000 annually and at the same time requested partial and interim relief in the amount of
$39,559,000 annually. On June 2,1975, the MPSC approved an interim increase of $29,194,000. The MPSC decision on final relief is expected later in 1975.
Litigation is pending with respect to electric and gas rate increases which became effective in 1969 and which are subject to refund relating to the reduction and elimination of the Federal income tax surcharge.
In March and April 1974, the Court ruled in favor of the MPSC with re-spect to the income tax surcharge issue and ordered the Company to re-fund approximately $24,543,000, together with interest thereon, to its electric and gas customers. The Company has established a reserve stated net of related income taxes in the amount of $11,868,000, approx-imately, and believes that the amount of such reserve is adequate to cover the refund obligation, exclusive of interest charges which would accrue for the period from early 1970 to date of payment and which are presently not capable of determination. The Company is appealing the Court Orders of March and April 1974. The litigation also involves a claim with respect to the legality of the electric rate increase, which became effective in 1969, on the grounds that the increased rates became effective by Court Order in October 1969, that the MPSC did not issue an order approving said rates until April 1970 and that as a result, the electric rates charged during the period are subject to refund in an amount of approximately $7,763,000, plus interest charges which are presently not capable of determination, for which no reserve has been provided.
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Page 8 of 11 NOTES TO FINANCIAL STATEMENTS (Contd)
(10) PENSION PIAN The Company has a trusteed noncontributcry pension plan under which full-time regular employees within specified age limits and periods of ser-vice are qualified to participate.
The contributions to the plan were
$15,863,000 for the 12 months ended June 30, 1975 Of this amount
$12,352,000 was charged directly to expense accounts with the remainder being charged to various construction, clearing and other accounts.
As of January 1, 1975, the date of the most recent actuary's report, the actuarially computed value of vested benefits was $184,400,000. The market value of the assets of the plan was $175,743,000 at June 30, 1975. If the market value of the assets of the plan remains below the vested benefits, the actuarial method used in determining the annual contribution will fund this amount over a period of years.
The enactment of the Employee Retirement Income Security Act of 1974 will not significantly increase the Company's future annual contribution since the Company's present plan generally conforms to minimum require-ments.
The unfunded prio-cost at January 1,1975, the date of the most recent actuary'.
Art, amounted to approximately $21,031,000.
(11) INCOME TAX EXPENSE Income tax expense is made up of the following components:
June 30, 1975 Charged to utility operations -
Current Federal income taxes
$ 6,363,551 Current State income taxes 2:389,372 Deferred Federal income taxes, net 19,773,303 Deferred State income taxes, net 3,730,245 Charge equivalent to investment tax credit, net 7,820,082 Total (see Statement of Income)
$40,076,553 Charged to nonutility operations - current 1,697,932 Total
$41,774,h85 For 1974 the Company had a net operating loss which, when carried back to prior years, results in a refund of approximately $17,651,000.
m A-11 Paga 9 cf 11 NOTES TO FINANCIAL STATEMENTS (Contd)
The Company utilizes liberalized depreciation and the " class life asset depreciation range system" for income tax purposes. Income tax de-ferred due to the use of these methods is charged to income currently and credited to a reserve for deferred income taxes. As income taxes previously deferred become payable, the related deferrals are credited to income.
Certain costs, principally interest, capitalized in accordance with the provisions of the Uniform System of Accounts, are expensed for income i
tax purposes and the tax reduction resulting therefrom is reflected in the income statement currently as ordered by the Michigan Public Service Commission.
The investment tax credit and job development investment credit utilized as a reduction of the current year's income tax is deferred and amortized to operating expense over the life of the related property. As of December 31, 1974, the Company has unutilized investznent tax credits of approximately $14,236,000.
The total income tax expense as set forth above produces an effective income tax rate of 34.7% for the 12 months ended June 30, 1975. The following schedule reconciles the statutory Federal income tax rate'of h8% to such effective income tax rates.
June 30, 1975 Amount Rate Computed " expected" tax expense -
$57,706,853 48.0%
Increase (reduction) in taxes resulting from:
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Certain capitalized construction costs, principally interest, deducted currently for income tax purposes for which no de-ferred taxes are provided in cecordance with the requirements of the MPSC (15,986,080)
(13 3)
State income taxes, net of Federal income tax benefit 3,290,595 2.7 Amortization of deferred investment tax credit (1,315,360)
(1.1) other miscellaneous items (1,921,523)
(1.6)
Actual tax expense
$41,774,h85 34.M I
d A-12 Pag 2 10 of 11 NOTES TO FINANCIAL STA'IEMENTS (Contd)
(12) ALICWANCE FOR FUNDS USED DURING CONSTRUCTION The allowance for funds used during construction is being capitalized at a rate of 8% in 1975 and was capitalized at 7-3/4% in 1974. Based on the Company's source of funds for gross property additions, and assuming that the cost of financing other than common equity financing was equiv-alent to the current cost of long-term and short-term debt (before income tax effect), preferred stock and other sources, available in each year, the estimated common equity component of the allowance for funds used during construction amounted to 11.1% of net income available for common stock for the 12 months ended June 30, 1975 (13) NORTHERN MICHIGAN EXPIORATION COMPANY Northern Michigan Exploration Company (Northern), a wholly-owned subsid-iary of the Company, is engaged in gas exploration programs in northern Michigan and the southern United States. The Company's Board of Directors has authorized loans to Northern up to a maximum of $20,000,000 and has authorized a total common stock investment of $20,000,000.
Northern has filed an application with the Federal Power Commission (FPC) for approval to sell gas from certain offshore Icuisiana properties to Consumers Power Company. Hearings on the matter are pending. However, during the interim period, Northern has entered into a one year Limited Turm Sales Contract with Trunklinc Gas Company, such contract to be ter-Linated upon FPC approval of the contract with Consumers Power Company.
Northern follows full cost accounting for financial reporting purposes including a policy of capitalizing interest costs related to properties in process of development.
Interest capitalized amounted to $1,480,000 for the 12 months ended June 30, 1975. Had these interest costa not been capitalized, the Company's net income would have been reduced ap-proximately $733,000 for the 12 months ended June 30, 1975 Summarized financial infomation of Northern is shown below.
12 Months Ended June 30, 1975 Operating Revenues
$17,915,000 Net Income 5,964,000 At June 30, 1975 i
l Gas and Oil Properties
$58,131,000 i
Total Assets 68,844,C00 Stockholders' Investment 25,134,000 Production Payment 28,971,000
d A-13 Pag 2 11 cf 11 NOTES TO FINANCIAL STATEMEfffS (Contd)
(14) RESTATEMENTS Retained earnings at June 30, 1974 has been restated to eliminate
$4,038,993 in deferred income taxes provided in the years 1970, 1971 and 1972 applicable to the gain on reacquisition of long-term debt since such deferred taxes were not recognized by the Michigan Public Service Couunission (MPSC) in setting the Company's rates for utility service and such deferred tax accounting has not been authorized by the MPSC as required by Federal Power Commission Order No 504, dated February 11, 1974
m Ill Appendix B-1 STATE 0F MICHIGAN
- BEFORE THE HICHIGAN PUBLIC SERVICE COMMISSION In the matter of the application
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of CONSUMERS POWER COMPANY for
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cuthority to increase its rates
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Case No. U-4717 for the sale of gas.
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At a session of the Michigan Public Service Commission held in its offices In the city of Lansing, Michigan, on the 2nd day of June, 1975 PRESENT:
Hon. William G. Rosenberg, Chairman Hon. Lenton G. Sculthorp, Commissioner Hon. William R. Ralls, Comnissioner ORDER GRANTING PARTIAL AND IMMEDIATE RATE RELIEF l.
l HISTORY OF PROCEEDINGS On November 27, 1974, Consumers Power Company (Applicant), filed an applica-tion in this matter requesting that the Commission conduct hearings and thereafter cpprove for Applicant additional annual gas revenues of at least $54,157,000.
At the time of filing its application, Applicant also filed a Motion for Partial and immediate Rate Relief requesting that, pending a fi'nal order in this case, the Com-
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cission grant Applicant authority to place into effect temporary gas rate schedules designed to produce at least $39,559,000 of additional annual gas revenues.
Con-current with its application and its Motion for Partial and immediate Rate Relief, Applicant filed the proposed written direct testimony of its witnesses and copies of its proposed exhibits.
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l On December 18, 1974, the Comission issue its Notice of Hearing to which were attached sumaries of Applicant's proposed rate changes and proposed gas" The Notice rate schedules designed to produce the additional revenues requested.
of Hearing required that Applicant pubilsh notice of hearing in the same newspapers throughout its gas service area and in substantially the same style and inanner as In addition, Applicant the notice of hearing was publishr.d for Case No. U-4331.
J was required to mall a copy of the Comission's Notice of Hearing to all cities,
. incorporated villages, counties,.and townships within its gas service area, as well cs to all Intervenors or participants who appeared in Cases Nos. U-3907 and U-4331, being the most recent two gas rate increase proceedings of Appilcant.
1 The Notice of Hearing established the following hearing dates:
1.
January 20, 1975, in Lansing, an Inltlal hearing being in the nature of a Prehearing Conference.
2.
January 28, 1975, in Lansing, for comencing public hearings for the special purpose of taking statements and testimony.of interested persons. A special evening
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hearing was scheduled for 7:30 p.m. on such date.
3 February 10, 1975, in Lansing, for the purpose of com-mencing cross-examination of Appilcant's witnesses.
. The Initial hearings proceeded as scheduled.
Cross-examination of the direct testimony of Applicant's witnesses commenced on February 10, 1975, continued on February 11, 12, 13, 14 and was completed on February 19, 1975 On February 19, 1975, Appilcant requested that the Commission Staff (Staff) file by February 28, 1975 a statutory report on Applicant's Motion for Partial and imme-diate' Rate Relief and that the hearing on this motion be held as soon theicafter as possible. The Staff opposed Applicant's request and took the position that hearing on the matter of interim relief should not be changed from March 31, 1975, which i
date had been set at the Prehearing. Conference.
On February 20, further discussion end argument was conducted on Applicant's request to change the time of hearing on Page 2 U-4717
m B-3 inthrim relief, as well as the manner in which Staff would present its evidence on I
On February 20, 1975, th'e Applicant's Motlop for Partial and immediate Rate Relief.
Hearings Examiner (now Administrative Law Judge) ruled that March 3'1, 19'7,5 would continue to be the date set for commencement of hearing on Applicant's Motion for Partial and immediate Rate Relief.
On March 21, 1975, Appilcant filed a Renewal of Motion for Partial and immedicte Rate Relief again requesting that the Commission grant Applicant authority to place into effect, pending a final order in this case, temporary gas rate schedules de-of additional annual revenue from its gas si,gned to produce at least $39,559,000 Concurrent with the filing of its Renewal of Motion for Partial and operations.
immediate Rate Relief, Appilcant served copies of such pleading upon each Rule 11 and Rule 16 Intervenor in the instant case.
The Staff and Intervenors filed their written direct testimony and exhibits on or before March 28, 1975 with the exception of the testimony and exhibits of two intervening witnesses'which were flied subsequent thereto.
On March 31, 1975, a hearing was held on Applicant's Motion for Partial and immediate Rate Relief.
At this hearing the Staff's direct case and exhibits were received into evidence and the Staff's witnesses were cross-examined for the purpose of considering interim relief on'ly.
At the conclusion of cross-examination of the Staff's witnesses, the parties presented argument. on Appilcant's Motion for Partial and immediate Rate Relief.
Cross-examination of the direct testimony of the Staff's and Intervenors' witnesses commenced on April 14, continued on Apri,1 16, 17,21 and was completed on April 22, 1975 Among the Intervenc.s who actively participated in the proceedings to the date of the hearing on interim relief are General Motors Corporation, Dow Chemical Company, Owens-1i1inois, Inc.', Michigan Sugar Company, SWS Si11 cones Corporation, Hol11 day Park Towre Houses Cooperative, Detroit Me'tropolitan Growers Association, Michigan Page 3 U-4717
o B-4 State Florists Association, Grand Valley Growers Cooperative, Great Lakes Mushroont Cooperative Association, Michigan Plant Growers Cooperative, Kalamazoo Valley Plant-Growers Cooperative and Mr. John H. King.
All parties completed presentdtion of evidence including rebuttal and surre-buttal on May 13, 1975 and the Administrative Law Judga closed the. record on May 13, 1975 On May 15, 1975, the Staff filed a motion to reopen the proceedings for the pur-pose of presenting testimony and evidence regarding Applicant's Marysville synthetic natdral gas facility as originally ordered by the, Commission'in Re: Consumers Power Company, Case No. U-4331, Interim Order (November 9, 1973).
A hearing on the Motion to Reopen has been scheduled for June 6,1975 Adrainistrative Law Judge Robert E. Hollenshead has presided at all 19 days of hearings held through May 13, 1975 The Commission has not directly participated in the daily hearings but each Commissioner has read the record in this case as required by Section 81 of 1969 PA 306, as amended, MCLA 24.?81.
As of May 13, 1975, 60 exhibits had been offered and 59 exhibits had been received into evidence.
The transcript of the proceedings as of May 13, 1975' comprises 2,802 pages.
II.
REQUIREMENTS AND CRITERI A FOR PARTIAL AND IMMEDI ATE RATE RELIEF Before partial and irrmediate rate relief may be granted to a utility seeking to increase its rates and cherges, the statutory requirements set forth in Section 6(a) of 19'39 PA 3, as amended, MCLA 460.6a, must be met.
Ir. addition, the requirements and criteria set forth by the Commission in its Interpretive and Informational State-ment 1974-3 must be satisfied.
Statutory Requi rements Section 6(a) of 1939 PA 3, as amended, MCLA 460.6a(1), provides that:
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e o-a "Sec. 6a. (1) When any finding or order is sought by any gas, telephone or electric utility to increase its rates and charges or to alter, change or amend any rate or rate schedules, the effect of which will be to increase the cost of services to Its customers, notice shall be given within the service area to be affected. When such utility shall have placed in evidence facts relied upon to support i ts pet i tion or application to so increase its rates and charaes, or to so al ter. chanac or amend any rate or rate schedules, the commission. pendino the sub-mission of all proofs by any interested parties. may in its discretion and upon written motion by such utility make a finding and enter an order _ eranting partial and immediate relief, after first ha.;ng given notice to the interested parties within the service area to be affected in the manner ordered by the commission, and after having afforded to such interested parties reasonable opportunity for a full and complete hearing:
P rov i ded, That no such finding or order shall be authorized or approved ex parte, nor until the commission's technical staf f has made an investigation and report:
And provided further, That any alteration or amend-ment in rates or rate schedules applied for by any public utility which will result in no increase in the cost of service to its customers may be authorized and approved without any notice or hearing."
(Emphasis added)
Therefore, before an order granting partial and immediate rate relief may be issued, the following statutory prerequisites must be met:
1.
Notice shall be given within the service area to be affected.
2.
The utility shall have placed in evidence facts relied upon to support its application, pending submission of all proofs by any interested parties.
3 A written motion shall be filed by the utility.
4.
Interested parties shall be afforded reasonable oppor-tunity for a full and complete hearing.
5 The Commission's technical staff shall make an investi-gation and report.
Commission Requi rements and Cri teria in order to provide a rational and effective method of providing partial and im-mediate rate relief according to Section 6a, 1939 PA 3. as amended, HCLA 460.6a, the Commission issued its Interpretive and Informational Statement 1974-3, Procedures for Partial and immediate Rate Relief, which provides that prior to a decision by the Page 5 U-4717 e
O 3
B-6 Comission on the merits of any such motion, the following circumstances shall occu'r:
A.
The aeolicant shall have placed in evidence the facts rellco upon in support of its application.
B.
The facts relied upon by Applicant shall have been cross-examined by all parties to the proceeding in accordance with the schedule set forth by the presiding officer.
' pon the, completion of the Appilcant's direct case and U
C.
cross-examination thereof, the staff of the Commission sha11' enter upon the record an investigation and report.
i D.
Such report shall be presented by appropriate staff witness or witnesses based upon the completed sfaff audit and other necessary facts and opinions.
The staff may submit its entire case in chief, or any portion thereof, as its report and may submi t such additional evidence as it deems necessary for its recommendation regarding the merits of the motion for partial and immediate relief.
E.
Such report shall be subject to cross-examination by all parties to the proceeding.
F.
Upon completion of cross-examination of the staf f in-vestigation and report and prior to the submission of further proofs by the staff or other interested parties, Appilcant's motion for partial and immediate relief shall be heard before the presiding officer or the full Commission, giving all interested parties reasonable opportunity to argue the merits of Appilcant's motion.
G.
Upon completion of the hearing on the motion for partial and immediate relief within the schedule established by the presiding officer, the motion shall be ripe for Commission decision.
In addition to setting forth the above-cited procedural requirements, inter-pretive and Informational Statement 1974-3 also stated that the substantive criteria for granting interim relief which were set forth in Re: Michigan Consolidated Gas Company, Case No. U-3740, should continue to be applied unless the facts and cir-cumstances require different considerations.
In Case No. U-3740, the Commission determined that the statute authorizing interim relief requires neither an emergency situation nor extraordinary conditions.
i Specifically, the Commission s'.ated in its Interim Order as follows:
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y,7 "We believe, that beyond this obvious requirement (i.e.,
an apparent existing revenue deficiency) there should be at least one of the following conditions in existence r.
before the Commission should grant partial and immediate rate relief, where a final order would ordinarily be issued within a short period of time:
(1)
Inability to arrange debt financing at reason-able rates without improved revenues.
(2)
Distinctive and sudden decline in revenues.
(3)
Evidence to indicate that deferral of partial rate relief until a final order can be issued would cause unreasonable and harmful loss of revenues to applicant utility.
(4)
Reasonable grounds for the Commission to believe that denial of the motion would cause irreparable harm to the applicant utility."
Ill.
1 POSIT 10!is OF THE PARTIES None of the parties participating in this case expressed any opposition to the granting of interim rate relief to Applicant, and only Applicant and the Staff ex-pressed any opinion as to the amount of interim relief which should be granted.
Sev'eral of the intervening parties did, however, take positions concerning Applicant's proposed interim relief rate structure.
Applicant As t=s previously indicated, Applicant requested interim relief in the amount of $39,333,000 when it or:ginally filed its application, direct testimony and exhib-its.
However at the March 31, 1975 hearing, after the Staff recommended interim relief in a greater amount than Applicant originally requested, Applicant amended j
its Motion for immediate and Partial Rate Relief and requested $41,989,000 of interim relief.
The derivation of Applicant's original request for interim relief of $39,559,000 l
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was arrived at by utilizing the same figures Applicant recommended for approval for its proposed final relief of $54,157,000 with the exception that Applicant used a rate of return of B.06%, the rate of return approved in Applicant's last rate case, rather than 8.89%, the rate of return advocated by Applicant for final relief in the instant proceedings.
Specifically, Applicant's original request for, Interim rell5f was based upon the following calculations:
$ 843,244,000 Gas Rate Base 8'.06%
Rate of Return Required Revenue 67,965,000 Adjusted Net Operating income 48,999,000 Income Deficiency 18,966,000 Revenue Deficiency 39,559,000 Applicant derived its original proposed interim rates of $39,559,000 by ratioing down its proposed final relief of $54,157,000 proportionately by rate schedule so that the relationships established in its final proposal were generally maintained.
Ap-plicant also proposes that certain changes in its rates and charges should be approved in an interim relief order. These changes involve a boiler fuel surcharge, usage restrictions applicable to Applicant's Rate E rate schedule and a charge of $15.00 when a customer orders a disconnection and reconnection of service within a period,of In addition to the above modifications, Apolicant proposes that for twelve months.
interim relief the service charge for Rate A be increased to $4.00 per month and the l
service charge for Rate B and Rate R-1 be increased to $4.65 per month.
The present service charges for.these rates are $3.20 and $3.50 per month, respectively.
The boiler fuel surcharge proposed by Applicant would expand the present coverage
(
of this surcharge so as to cover gas used in all boilers rated at 6,600 cubic feet per hour and greater.
For the purppses of this surcharge, boilers would be defined as all closed vesseIs in which a liquid, usually water, is heated or vaporized by Page 8 U-4717-
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the burning of natural gas.
At the present time' Applicant's boiler fuel surcharge In addition, the boiler cnly applies to gas used as fuel for process steam boilers.
fuel surcharge would be made applicable to Applicant's Commercial and Industrial inter-Seasonal Service Optional Contract Rate E and its Commercial and Industrial i
ruptible Servic,e Optional Contract Rate F, which rates do not presently have a boiler surcharge.
if In support of its proposed boiler fuct surcharge, Applicant claims that the boiler fuel usage of natural gas is considered to be low priority end usage, surcharge should apply to all such boilers whether or not water or another liquid is heated or vaporized, regardless of the rate schedules under which the customer has chosen to take service and regardless of whether or not the boiler surcharge is for commercial and industrial processing or is for space heating and conditioning for human comfort.
Furthermore, Applicant claims that its proposed modification would eliminate difficulties in administering the present boiler fuel surcharge.
Applicant requests that its proposed boiler fuel surcharge be included in an interim rate increase rather than await inclusion in a final order because of the disparity among customers which exists under the present boiler surcharge.
Appil-cant claims that at the present time many of its customers are subject to the boiler fuel surcharge even though their use of steam for processing use is small propor-tionately to the total steam produced while other customers with large boilers pay no surcharge at all since they do not use steam for processing.
According.to Ap-plicant, 50% of the natural gas used to heat boilers is for the purpose of genera-
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ting " steam for space heating.rather than processing.
A.foption of i t s proposed boile r fuel surcharge would, according to Applicant, immediately remove this disparity.
The usage restriction that Applicant proposes for Rate E Option (c) provides for customers under these provisions to specify their annual contracted volume by 12 monthly volumes.
In the event of interruption of gas service, the customer's annual contracted volume will be reduced by 1/30th of the contracted monthly volume for each Page 9 U-4717
B-10 The pres-dry of interruption during the month in which an interruption takes place.
cnt usage restriction for Rate E Option (c) provides that this customer's annual c:ntract volume ir, reduced 1/360th for each day of interruption.
Applicant states that its proposed change to the usage restrictions for Rate E Option (c) is for the purpose of eliminating anticipated difficulties in administering the present usage restriction and to provide a nondiscriminatory me'thod of reducing oil Rate E Option (c) customers' annual contracted volumes to reficct interruptions which take place in accordance with the rate schedules.
According to Applicant, the present usage restriction enables customers to circumvent redu'ction of gas sales dur-ing periods of interruption when these customers consume all of their annual allocated 9as prior to a period of interruption.
Applicant claims that its proposed usage re-striction, which.is based on contractual monthly components, would prevent this pos-sibility from occurring.
Furthermore, Applicant indicated that this proposed usage restriction should be included in interim rates to facilitate administration of seasonal and interruptible rate schedules during 1975 Staff The Staff recommends that, if interim relief is granted, this relief should be in the amount of $40,606,000. This amount actually constitutes the Staff's recom-mendation for final relief with the exception of an adjustment which may be made to net operating income as a result of financial experience under the Commission's new billing practice rules which went into effect March 4, 1975 Specifically, the Staf f's recommendation for relief as presently computed is as follows:
Net Utility Plant, including Working Capital
$846,112,000',
Rate of Return 8.20%
Required Revenue 69,38i,000 Adjusted Net Operating income 49,915,000 incomc Deficiency 19,466,000 Revenue Deficiency 40,606,000 Pays 10
m.
e, B-ig The Staf f recommends that, if the Commission grants interim relief, the re-sulting increased revenue should be determined on an across-the-board percentage
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bas'is to the various rate classes. The revenue increase to any given class should be computed by determining the percentage increase based on present revenues inclu-sive of purchase gas adjustment revenues.
Furthermore, the Staff advocates that, for interim relief purposes, there should be no change in the various rate structure provisions in the existing rate schedules. Although the Staff recommends that the Commission in its final order amend the boiler fuel surcharge and amend the usage restriction of Rate E Option (c) It opposes adoption of such changes for the purposes of interim relief.
Also for interim relief purposes, the Staff does not recommend any changes to the service charges or reconnection charges of any rates.
Intervenors Although, as was previously Indicated, none of the Intervening parties objected to any interim rate increase, some Intervenors expressed strenuous opposition to Applicant's proposed changes to the boiler fuel surcharge and its proposed changes to the usage restriction applicable to Rate E Option (c).
Also, some of the inter-vening parties objected to Applicant's allocation of I cs proposed interim increase 4
among the various rate classes.
j intervenors Michigan Sugar Company (Michigan Sugar) and Owens-Illinois, Inc.,
(Owens-111tnois), both of which are Rate E customers of Appilcant, requested that any interim rate order not alter or change the present usage restrictions applicable to Rate E Option (c). These two Intervenors further indicated that if interim relief is granted by the' Commission such relief should be allocated among Applicant's various rate classes on an equal percentage basis, maintaining the relative positions of the classes. They also claimed that the commission should withhold making any deter-mination as to shifting costs between rate classes until a final order is issued in the instant case.
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Page 11 U-4717
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B.12 Intervenor Dow Chemical Company (Dow) expressed strong opposition to Appif cant's, allocation of proposed rates among its various rate classifications and, in particular, objected to Applicant's cost of service study used in support of its proposed interim and final rates.
Specifically, Dow objected to assignment of investment, operating and maintenance expenses of the Marysville Gas Reforming Plant to the industrial and commercial classes, allocation of storage costs on a 50% commodity - 50% excess gas basis, and allocation of distribution mains strictly on a non-coincident demand basis.
Dow also opposed Applicant's proposed modification of the boiler fuel surcharge and, in fact, argued for abandonment of the present boiler fuel surcharge.
Intervenor General Motors Corporation concurred with the positions taken by Michl-it did not consider the gan Sugar, Owens-Illinois and Dow and further argued that SWS S11icones present existing rate structure to be appropriate or even legally valid.
Corporation's only position as to the matter of interim relief was its opposition to This intervenor claimed Appilcant's proposed modification of the boiler fuel surcharge.
that there was no support on the record for Applicant's position that greater con-servation of gas would result from expanding the present boiler fuel surcharge.
IV.
COMMISSION FINDINGS ON PROCEDURAL REQUIREMENTS As evidenced by the proof of service on file in this matter, the Commission finds that Applicant has complicd with the notice requirement s contained in its December 18, 1974' Notice of Hearing.
Furthermore, the Commission f *.nds that all Rule 11 and Rule 16 Intervenors have been served with a copy of Applicant's Renewal of Motion for Partial and immediate Rate Relief.
In so finding, the Commission further finds that Applicant I
has satisfied the notice requirements established both by Section 6a of 1939 PA 3, as amended, MCLA 460.6a, and the Commission's Interpretive and information Statement 1974-)
The Commission also finds that Applicant has complied with the other procedural Page 12 U-4717 -
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i requirements set forth in Section 6a, 1939 PA 3, as amended, and interpretive and Information Statement'1974-3 This procedural compliance has been accompilshed in j
that Applicant's direct case has been placed in evid,ence and cross-examined.
Appil-cant has filed a written motion for partial and immediate rate relief and has renewed i
The Staf f audit has been completed, the statutory report Its motion for such relief.
in the nature of the Staff's direct case has been placed into evidence and has been i
I cross-examined, arguements have been. heard on interim relief and interested parties i
have been afforded reasonable opportunity for a full and complete hearing.
I V.
COMMISSION'S FINDINGS ON SUBSTANTIVE CRITERIA FOR GRANTING INTERIM RELIEF The record of these proceedings to date demonstrates that Applicant's financial situation is indeed precarious. Appilcant's earnings on its common shares were $1.34 a share for 1974, substantially less than its $2.00 cash dividend which has been in i
effect for several years. The return on Appilcant's common equity for 1974 was less than'5%, substantially below the 12.12% presently authorized.
l Because of Appilcant's unsatisfactory earnings picture, Applicant's securities have been downrated by Moody's and Standard and Poors, the nation's two major securi-ties rating. agencies.
As a result of Appilcant's decline in earnings and the low rating oft its securities, i t has been impossible for Applicant to sell any meaningful
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j amount _of conventional securities.
n.
At the same time, however, Applicant must finance during 1975 a $251,000,000 " bare bones"' construction program of which approximately $30,000,000 is for gas construction.
In addition to its. construction requirements, Applicant in September, 1975 must re-finance $86,300,000 of 2 7/8% first mortgage bonds.
Totaling both the 1975 construc-tion program.and Applicant's bond refinancing requirements, it will be necessary for Applicant to obtain'approximately $270,000,000 from external sources.
According to Page 13
R B-li Appilcant, this amount constitutes the largest amount Applicant has ever had to'obtain externally in a single calendar year.
r.
Although Applicant and the Staff differ as to the final amount, it is clear from the present record that Applicant has a substantial revenue deficiency.
Although no party to the case claims that such a revenue deficiency does not exist,. Applicant and the Staff differ considerably as to the final amount of such revenue deficiency.
In-asmuch as further evidence may be placed on the record as to the final amount of such a deficiency and the parties need to be given opportunity to brief this matter, the Commission determines that it would be inappropriate to determine the exact amount of su'qh a deficiency at this time.
It is therefore clear that in addition ~to the existence of a substantial revenue deficiency, the record estabitsbes that three conditions, as set forth in Case No.
U-3740, exist necessitating interim relief.
First, Appilcant has demonstrated th.at It has an " inability to arrange debt financing at reasonable rates without improved revenues."
in addition, the record establishes " evidence to indicate that deferral of partial rate relief until a final order can be issued would cause unreasonable and harmful loss of revenues to applicant utility" and " reasonable grounds for the Commission to believe that.the denial of the motion would cause irreparable harm to the applicant utility."
VI.
INTERIM CONCLUSIONS OF THE COMMISSION The Commission finds that Appilcant is currently experiencing a revenue deficiency and is entitled to partial and immediate rate relief in the amount of $29,194,000, sub:
Ject to refund and secured under bond pending a final order in this proceeding.
The Commission findings with r'espect to interim relief specifically reserve until a fi al order in this matter several issues of significant Import.
Page 14 U-4717
B-15 jWhile Applicant and the Staff both advocate that Applicant's rate of return on comon equity be increased, there is a substantial difference between their positions on this matter.
Applicant argues that a rate of return of 15 5% on common equity should be approved. The Staff recommends that the return on common equity should fall within a range of 12.34% to 13.5%.
In view of the parties' marked difference of opinion as to the appropriate rate of return on common equity, the Commission con-cludes that any final determination as to the appropriate rate of return on common equity should await the Commission's final order in this proceeding.
For purposes of this interim rate increase, however, the Commission finds that the record appro-priately supports continued utilization of Appilcant's present authorized rate of return on common equity of 12.12%.
In addition, the Commission finds that the questions presented regarding Appli-cant's synthetic natural gas plant at Marysville should not be determined until the issuance of a final order in this case.
Applicant has requested that the full cost i
.of this facility be included in approved rate base as well as various other adjust-ments such as depreciation and operation expenses attendant thereto, in Case No. U-4331, the Commission approved inclusion of $119,700,000 of the coq of the Marysville facility in Applicant's rate base and reserved final determina-tion with respect to the additional $35,101,551 pending completion of the Commission ordered study of the design and construction of the plant conducted under the auspices of the Staff and presentation of the Staff's recommendations related thereto.
The Commission notes with approval the Staff's Motion, to Reopen the Record in these pro-ceedings for the purpose o# presenting testimony and evidence with respect to the study.
While the Commission is aware of the critical need to complete rate proceed-Ings within the 9-month statutory.nandate, an overriding public interest requires that all questions relating to the Marysville facility be resolved as expeditiously as po.s-sible based upon a full and complete record. Moreover, the scheduled proceedings l
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herein did not permit inclusion of these questions in the Staff case as the Mary'sville study was received subsequent to the prescribed filing dates.
Accordingly, the Commission finds that the Interim relief granted herein should not include any Marysville investment costs beyond those approved in Case No. U-4331.
Final determination of these factors should await development of the ful'1 record {
Due to the unique nature of the Marysville facility, the Commission in Case No.
U-4331 determined at Page 25 that certain operation and maintenance ewenses as esti-mated were reasonable and' directed the Staff:
...to conduct an audit of the operation and maintenance expenses of the Marysville plant at the conclusion of 12 months of opera-ting experience of that plant.
Such audit shall be designed (a) to. confirm that the expenses reficcted in Applicant's accounting records actually were expended for gas plant operation and main-tenance purposes, and (b) to determine the reasonableness of those expenditures in carrying out the operation and maintenance of the plant."
The first full 12 months of operation of both Train I and Train 11 of the Marysville facility ended on April 30, 1975 and the Staff is now conducting the audit as directed.
The appropriate adjustment for these expenses is a contested issue in these pro-ceedings.
For purposes of this interim order, the Commission finds that the Staff's lower operation and maintenance expenses based on known calendar 1974 Marysville operhtlons normalized are reasonable.
While the Staff considered operating experience at Marysville through the first quarter of 1975 which encompasses the first 11 months of operation of both Train i and 11 in arriving at its normalization calculattens ard adjustments, the Commission is advised that the report by the Staff on the resul ts c.f the audit ardered in Case No. U-4331 will be available for consideration prior to a final order in this case.
Finally, the Commission's decision includes a reasonable estimate of expenses being incurred by Applicant for the impicmentation of and compilance with the Commis-ston's Consumer Standards and Billing Practices, Case No. U-4240.
While substantial Page 16 U-4717
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9 disagreement exists between Applicant and the Staff as to the appropriate amount of this adjustment, the Commission finds that for purposes of interim relief the Staff's revenue adjustment of $824,000 is reasonabic.
Therefore, the Commission finds interim relief should be granted in the amount of $29,194,000 based upon Applicant's presently authorized rate of return on common in-equicy of 12.12%, the Staff's rate base exclusive of additional Marysville plant vestment and the Staff's net operating income adjustments exclusive of additional Marysville inves: ment factors as previously described.
the Commission In arriving at the amount of interim relief approved in the case, is indeed mindful of the present nationwide economic recession and the severe impact this recession has on many people within Applicant's service area.
However, it is essential to the economic vitality of Applicant's service area that. Applicant's rates be sufficient to ensure adequate gas service. To refuse to grant Applicant sufficient interim rate relief v:ould be detrimental, not only to Applicant, but to its residen-j tial, commercial and industrial customers as well.
If the $29,194,000 of interim rate relief is excessive, the ratepayers will be entitled to a full refund of this excess, as the rcilef granted will be collected under bond.
Vil.
RATE DESIGN From the record established to date, it clearly appears that the matter of rate design is a hotly contested issue under consideration in the instant proceedings.
Appilcant's proposed allocation of an interim rate increase among the various rate classes and its proposals to amend the boiler fuel surcharge an'd the usage restric -
tions. applicable to Rate E Option (c) are vigorously opposed by various intervening parties.
Several of these parties take serious issue with the cost-of-service meth'odology Page 17 U-4717
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.I B-18 which Applicant utilized in designing both its proposed interim and final rates.
On-the other hand, Applicant contends that this cost-of-service methodology was ' based on the methodology approved by the Commission in its Opinion and Order in Case No.
U-4331 dated November 19, 1974.
In that Opinion and Order the Commission discussed at page 14 its approa'ch to cost-of-service methodology and stated as folio "In reaching these determinations, the Commission finds that in addition to fully distributed cost allocations apportioned according to cost accounting principles, it must and has considered a variety of other factors such as rate relation-ships between various rate schedules for customer classes, the cost and availability of alternate energy sources, the practicality of conversion to alternate energy sources, the availability of natural gas and the compelling need to continue conservation of this energy resource.,The Commission must therefore, determine appropriate rate design employing additional factors rather than strictly using mathematical computations in setting fair and reasonable rates for various customer classes."
The Commission finds that a reexamination of its previous rate structure deter-minations will be presented for full consideration in the final order in these pro-ceedings.
Pending this review, the Commission finds that the most appropriate method for allocating the 4.76% overall increase in rates as required by this interim order is,as follows:
.l Domestic 2.92%
Commercial 6.32%
Industrial 6.32%
This approach maintains the essential allocation methodology adopted by the Conynission in Case No. U-4331..:.:le at the same tiime more equitably allocating the burd'en of the rate increase among the commercial and industrial rate classifications pending a final order in this case.
The Commission agrees with the Staff that Applicant's other proposed changes to' rates and charges should not be adopted in this interim order.
The record should be fully developed before re, aching any final conclusions on such changes.
This conclu-slon is particularly warranted as to the controverted proposed changes with respect Page 18 U-4717
c.
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B-191
'to the boiler fuel surcharge and the usage restrictions for Rate E Option (c).
Finally, the Commission points out that the interim award does not affect Appli-ca'nt's approved purchase gas adjustment clause.
As is usual in these proceedings, the Commission will adjust the base for purposes of adjustment in its final order.
The Commission FINDS that:
Jurisdiction is pursuant to ISO 9 PA 300, as amended, MCLA 462.2 et seq.;
a.
1919 PA 419, as amended, HCLA 460.51 et seq.; 1939 PA 3, as amended, MCLA 460.1 et seq.; 1969 PA 306, as amended, MCLA 24.201 et seq.; and the Commission's Rules of Practice and Procedure,1954 Administrative Code, Supplement No 54, R 460.11 et seq.
b.
The statutory requirements of Section 81 of 1969 PA 306, as amended, MCLA 24.281, regarding familiarity with the record have been complied with, The statutory prerequisites of Section 6a(I) of 1939 PA 3, as amended, HCLA c.
460.6a(1) have been satisfied.
d.
The procedures for partial and immediate relief set forth in the Commission's Interpretive and Informational Statement 1974-3 (August 2,1974) have been satisfied.
The Commission's criteria for granting partial and immediate rate relief have e.
been met in that Applicant is experiencing a substantial revenue deficiency and that:
(1)
Appilcant is experiencing an inability to ar, range debt financing at reasonable rates without improved revenues; (2)
The evidence indicates that deferral of partial rate relief until a final order can be issued would cause unreasonable
.and harmful loss of revenues to Applicant; (3)
Reasonable grounds exist for the Comnission to believe that denial of Applicant's motion would cause irreparable harm to Applicant.
f.
Partial and immediate rate relief in annual gas revenues in the amount of
$29,194,000 is reasonable and in accordance with the conclusions contained in this order The interim rate schedules, attached hereto as Exhibit A and by reference made g.
a part of this order, will produce an annual revenue increase of approximately
$29,194,000 and approval of these interim rate schedules is in the public interest.
Page 19 U-4717
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.B-20,.
Applicant should file a suitable bond to insure that appropriate refunds wil.1 h.
be made to its customers in the event that the final order in this case provides a lesser amount of rate relief than the $29,194,000 annual revenue increase herein found necessary.
- THEREFORE, IT IS ORDERED that:
A.
The interim rate schedules, attached hereto as Exhibit A, are hereby approved to be effective-for service on and af ter June 3,1975.
B.
In conformance with Commission Order No. 0-3096, Filing Procedures, Consumers Power Company shall promptly submit to the Commission for filing, revised rate sched-ules in substantially the same form as the Interim rate schedules harein approved.
C.
Consumers Power Company shull file with the Commission a suitabic bond to in-sure that appropriate refunds will b'e made to its customers in the event that the final order in this case provides for a lesser amount of rate relief than the $29,194,000 5
annual revenue increases herein granted.
The Commission specifically reserves Jurisdiction of the matters herein contained an,d the authority to issue such further order or orders as the facts and circumstances may require.
MICHIGAN PUBLIC SERVICE COMMISSION (SEAL)
/s/ William G. Rosenberg Chairman By the Commission and pursuant to its action of June 2, 1975
/s/ Len~ ton G. Sculthorp i
/s/ Earl B. Klomparent.
Commissioner William R. Ralls is Its Secretary issuing a separate Dissenting Opinios Page 20 U-4717 Icc
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M.P.S.C. No. 6 - Gas B-21 Consumers Power Company
{'XHIBIT A
(To ver!se Afor:thly Rate and Fuel Adiustment) '
l RESIDENTIAL SERVICE (OPEN ORDER RATE "A**)
Availability:
Open to any customer desiring gas service for any usual residentlil use in private dwelliegs or separately mctcred ara,rtments. including space herting and air conditioninc. This rate is not avail.1b!c for comrnercial or induuric! ser. ice or for resale service. As a result of a shortage in gas supply, this rate is also not available for new custorners or new spact. Lesting load; other than those new customer > or new space heating loads which the Company is authorized by the Michigan Public Servica. Commission to attach to its system from tir;;c to time.
Residences in conju.)ction with comeiercial er industrist enterpriscs; apartment buDdings or multiple dwe!' int.st and mobile homes and courts may take. sersice on this rate ordy under the tenns and cond;tions contained in the Comp:ny's Standard Rules and Regulations.
Monthly Rate:
Servf:e Ch:rce:
53.20 per customer per month plus, Cr saiuodif y CharCc:
$1.15 per iscf for all lici pur:ht.,sec'. cxcept that duriv the billing r.tonth.* ofJuly throu. h September. t: sage in excess of 12 f.fcf per month shall be f.i!!ed at the rate of $1.,'O per Atef.
Cost of Grs Sold Adjaiment:
Tb cast of r.ss sold edjertm:nt shall cor.t.o of an inc*e.we or <!cere.+se in the chart.c per Mcf based i
on the differer:e betvir:n the weighted aver;'r/ menth'y co>t of g;.n per !.lef delisered into the Company's sut ply systern and 57.24 cents per Mef, rounded to the rentcst one-hu::dret'th cent per i
l Mcf. 'Ihis :.d.ju:ittuent s%it apply to 11 Mef inctnded ja the em.to.act's bill durin ; the billin;, month folto r int: the calendar mont's in which the p.r.s is de!ive.ed into the supply sy:tcen. To correct fo*
the or.c month las in tiis procedure 1.ctr ec s ecst incurrence i.nd i t!!i s: adjustment, the increas.' or decresse in the che ce per.tlcf ri: determined abosc s!.:-ll be appro;>ri.ttely incree. sed or decre.: sed by the differcn:c between thc "a se month.*ct;" adjustment fec.'or.rpplied in the Tre vding billin:
rnonth c::d the "one naonth Iq'*cdjustmer.t l actor to be cpt licJ for the immedicte bi;!ing m> nth.
' lay Adj:n.ir.wnl:
(a) Pilis shr!! be increased veithin th: limits of rolitical subdhi. Cons schich levy special tues,liccas.: fees or rentn!A arninst the Compe.1y's property, on its cimalian. or th production and/or ts!: of tsA. to off<.et such spreia! 'le.stts and thereby puunt other catca1us ham bein; compelled to :.hase such local increas:s.
(b) 11 ills t.h:dl be increaed in offset any new or increas:d spreific tax or excit.e imposad by :ny governrnent.st :nibusity upua the Cenacuy', production or safe ci ras.
Terns e nJ itu.3c of Contuct:
Open ont<.r. No visitten ::r;lication or contract regnited.
Rules ud P.ere.1 tia.::;:
Service gomned by Company's Standa:d Itules and Re:;ulati3ns.
Inter.im Surchar ja Adjustmont s Art interim E.urcharge of 5.82c or Mcf shall be added to thcr montli.i y bill.
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. 3[, d2 M.P.S.C. No. 6 -.* Cas J-Consumers Power Compa;y (To revise Monthly itete. Fuel Adjustment, add Iroiler Fuel Surtherer)
GENERAL COMMERCIAL AND INDUSTRIAL SERVICE k-*
(OPEN ORDER RATE "II")
Ava!!abillty:
Open to any customer desiring gas service for eny usual commercial or industrial use. This rate is not available for resale purpo>es. As a result of a shortage in gas supply, this rate is also not availab!c for new or additional commercial or industrist r,as loads other than those new or additional commercial or industrial gas loads which the Company is authorized by the Michigan Public Service Commission to attach to its system from time to time.
Monthly !!ste:
Service Charge:
33.50 per customer per month plus, Commodity Charge:
$1.39 per Mcf for all Mcf.
Cost of C:.s Sold Adjustment:
The cost of gas sold adjustment shall consist of an increase or decrease in the charge per Met based on the difference between the wciphted averare monthly cost of gas per Mer deuvered into the Company's supply system and 57.24 cents per Mcf, rounded to the nearest one. hundredth cent per Mef. This adj. stment r. hall apply to all Mcf included in th: customer's bill durii.e. the billin; rnanth following the calendar month in which the cas is delivered into the supply systern. To correct for the one month kg in this procedure betwcan cost incurrence and billin.e adjustment, the incrcase or decrease in the rhurge per Mef as descimined above shn.'l be cppropristgly increased,r decreased by the difference between the "one month lag" adjustment factor alplied in the preceding btlling
]r month and the "one month lag" adjustment factor to be applied for the imonediate billing month.
Boiler Fue! Surcharge:
~
Car used as fuel for steam producing boilers rat'ed at 6600 cubic fcer per hour or more shall be subject to a surchcrge of 3.10 per Mcf. In the event th:1 the total gas supplied by the Company serv.'s other requirements in addition to t?rocess 2tja.n fuel for such boilers, all Mef supplied as steam boiler fuci shall be separately mercred or sub_ metered.~~Soch'Ydditional cost of separate metering or submetering, as the case may be, shall be borne by the customer as a nonrefunu?abic capital contribution, or in lieu thereof, as a facilitics charre of X fuer month of the initial installcd cost. If the customer elects to forego wch separate metering or submetering, all Mcf purchased shall be subject.to such boder fuel surcharge.
Tax Adjustment:
J (a) Dills shall be increated within the limits of political subdivisions which levy special taxes, license fees or rectals against th; Company's property, or its operation, or the production and/or sale of cas, to offset such special charr.es and thereby preven other customers from being compe!!cd to sharc such local incre.nes.
(b) Ilills shall be inescased to offset any new or increased specific tax or excise imposed by any governn.cntal authority upon the Company's panduction or sale of cas.
Delayut Payment Charge A delayed payment charge of 27. of the total net bill, but not less than $.20, shall be added to any bill which is not peid on or before the due date shown thercon.
Irit.crim Surcharge Adjustment:
An interitn surcharge of 12.95C por Mcf shall be addeci to the JLml:hiv bill.
(Continnd on sher No.7.1) i o
M.1'.S.C. No. 6 - Ca's kN.-
Consumers Power Company
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(Continued from Shtet No. 7) v.
-Term and Form of Contract:
Open order. No written application or contract required.
Rules and Regulstions:.
Service govemed by Company's Standard Rules and Regulations.
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M.P.S.C. No. 6 - Cas Consumers Power Company (To revise Monthly Rate. Fue! Adiustment, odd Boiler Fuel Surcharsc) 6-*
COMMdRCIAL AND INDUSTRIAL SERVICE (CONTRACT RATE "C")
Availability:
Open to any customer desiring f.as service for any usual commercial or industrial use. During the term of the service contract gas shs11 not be purchased under sny other rate for sny equipment or process which uses gas under this rate. This rate is not available for resale purposrs. As a result of a shortage in gas supply, this rste is also not available for new or additional commercial or industnst gas loads other than those new or additional comraercial or industrist gas loads which the Company is suthorized by the 3
Michigan Public Service Commission to attach to its system facm time to time.
Monthly Rate:
Sersice Charge:
3320.00 per customer per month plus,
' Commodity Charge:
~
$1.00 per Mcf for all Mcf.
Cost of Cas Sold Adjustment:
The cost of gas sold adjustment shall consist of an increase or. decrease in the charge per Mcf based on the diffencnee between the weighted a<crage monthly cost of gas per Mcf delivered into the Company's supply system snd 57.24 cents per Mef, rounded to the nearest one hundredth cent per Mcf. This adjustment shall apply to all Mcf included in the customer's hill during the billing month following the estendar month in which the gas is delivered into the supply system. To correct for s.
the one month lag in thh proccdure between cost incurrence end billing adjustment, the increase or decrease in the charge per Mcf as determined above shall be oppropriately increased or decreased by the difference between the "one rnunth lag" adjustment factor applied in the preceding billing rnonth and the "one month lag" adjustment factor to be applied for the immediate billing month.
Roller Fuel Surcharge:
Cas used as fuct for steam producing boilers rated at 6600 cuble feet per hour or anore shall be subicct to a surcharge of S.10 per Mcf. In the event that the total gas supplied by the Company
. serves other requirements in addition la process steam fuel for such boilers, all Mcf supplied as steam boiler fuel shall be separctely mctcord or submetered. Such cJditional cost of separate metering or submetering, as the case may be, shall he borne by the customer as a nonsefundeble cap!!al contribution. or in lieu thereof, as a facilities charge of 2% per month of the initialinstalled cost. If the customer elects In fore.go such separare metering or submetering, all Mcf ps.rchased sha!!
be subject to such boiler fuci surcharge.
~
Tax Adjustment:
(a) llills shall be hicicJied within the limits of political subdivisions which levy special taxes, license fccs or rculais arainst the Company's property, or its operation, or ihe psoduction and/or sale of r.as, to offset such special chstges and thereby prevent other customers from being compclied to sharc such local inctcases.
(b) Dills shall be increased to offset any new or increased ' specific rsx or excise imposed by any governmental authority upon the Company'c ;iroduction or sale of gas.
Delayed Payment Charge:
A delayed psyment charge of 2% of tlic totsi net bill shall be added te> any bill which is not paid on or before the due date shown thereon.
Interim SurcharcJe Adiustment:
An interim surchartje of 10.67C. por Mcf sh.g] Qe g gf,i, g g3p t1 mon.1h.l.y_ bi 11.
B 25' MeP.S.C. No. 6 - Cas Comumers Tower Company RATE "C" (Continued from Sheet No. 8)
Term and Form of Contract:
Minimum term of one year on written c6ntract.
Rijles and Regulations:
Service governed by Company's Standard Rules and Regulations.
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M.P.S.C. N2. 6 - Gas Wo revise AfonrMe Ratel
. COMMERCIAL AND INDUSTRIAL SEASONAL SERVICE (OPTIONAL CONTRACT RATE "E")
This Rate is Not Open To New Business l
AvaDability:
Open to any customer who agrees to restrict his use of gas under this rate in sccordance with the provisions hereof. During the term of the service contract gas shall not be purchased under any other rate for any equipment or process which uses cas under tids rate. This rate is not available for resale purposes. As a result of a shortage in gas supply, tids Isle is also not available for new or additional commercist or industrist gas loads other than those new or additional commercial or industrial gas loads
,J which the Company is suthorized by the Michigan Public Service Commissior to attsr.h to its system from time to time.
Usage Restriction:
The customer must agree in the service contract to one of the following three options:
(a) Tots! usage of gas under this rate during the bD1ing aonths of January, February and March sha!!
not exceed 37.5 percent of the total use of gas under this rate durin_g the preceding billing months of June through September.
(b) Total usage of gas under this rate during the billing months of December, January, Febiusry and March shs!! not exceed 62.5 pcreent of the total use of gas under this rate dusing the preceding billings months of June through September.
(c) The customer ar, tees to completely interrupt his use of ras at any time upon 24 hours2.777778e-4 days <br />0.00667 hours <br />3.968254e-5 weeks <br />9.132e-6 months <br />' notice by th:
Company. The petiods of such interruption shall not algrecite more than 90 days in any onc j
calendar ycsr. The customer further acree> that Ids snnual ccmtracted volume will be reduced by i
1/360 for each' day of interruption.
Monthly Rate:
Service Charge:
Above 100;000 Mcf annual contracted volume
$3,000 per customer per month plus, 100,000 Mcf or below annual contracted volume
$1,000 per customer Commodity Charge:
$.90 per Mcf for all Mcf Excess Use Surcharge - Options (a) and (b):
In addition to the above Commodity Chsige, $10.00 per M cu ft shall he charged for all gas used in excess of the applicable usage restriction. Any ch:rge srising from the application cf this provision shall be inchided in the custorner's bi:1 fer the March buling month.
Unauthorized Oversun G:s - Option (c):
Gas used by a customer under this rate by sessoir oi'hi; failure to comply with an interruption order of the Company sh:ll be considered as unautho: ired overrun gas. Such gas shall be billed at the aste of $1100 per M cu ft.
Interim Surcharge Adjustment:
An interim surcharge of 9.78C per Mcf shall.be added to
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the monthly bill.
(Continued on Sheet No. 9.2d
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' 9 27 M.P.S C. Nr. 6 - Cas Consumers Power Company (To revise Fuct AJiustment)
RATE "E" I
- ~
(Continued from Sheet No. 9.1)
Jfonthly Rate: (Contd)
Cost of Gas Sold Adjustment:
The cost of gas sold adjustment shall consist of an increase or decrease in the charge per Mcf based on the differenec between the weighted average monthly cost of gas per Mcf delivered into the Company's supply system and 57.24 cents per Mef, rounded to the nearest one. hundredth cent per Mcf. This adjustment shall apply to all Mef included in the custorner's Sill during the billing month l
following the calendar month in which the gas is delivered into the se; p!y system. To correct for the one month lag in this procedure between cost incurrcace and billing adjustment, the increase or decrease in the charge per Mcf as determined above shall be appropriately increased or decreased by the difference between the "one month lag" adjustment factor applied in the preceding billing month and the "one month lag" adjustment factor to be applied for the immediate billing month.
. Tax Adjustment:
(a) liills shall 1 e inecessed within the limits of political subdnisions which levy special taxes, license fees or rentals against the Company's croperty, or its operation, or the production and/or sale of gas, to offset such special charges and thereby prevent other customers from being compelled to share such local inciesses.
(b) 13 ills s! all be increased to offset any new or increased specific isx or excise ireposed by any governmental authority upon the Company's production or sale of gas.
1 Delayed Payment Charge:
/
A delayed payment charge of 2% of the total net bill shall be added to any bill w'hich is not paid on 3
or before the due date shown thereon.
Term and Form of Contract:
All service under this rate sfiall require a minimum term of one yer.r on written contract.
Rules and 1(caulations:
Service governed by Compsuy's Standard Rules and Regulations.
Failure to comply with an interruption order of the Company shs!! constitute sufficient cause for the Company to discontinue'scivice under Option (c) of this rate.
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J-B-28 M.P.S.C. N2. 6 - C:s Consumers Power Company
-(To revise Afonthle Rare and Fuel Ad!ustmenry CO)n!ERCIAL AND INDUSTRIAL INTERRUPT!DLE SERVICE (OPTIONAL CONT! TACT RATE "F")
Availability:
Open to any customer desiring gas service which the Company is prepared to provide on an interruptible basis. During the term of the service contract, gas shall not be purchased under any other rate for sny equipment or process which uses gas under this rate. This rate is not availabic for ressle purposes. As a result of a shortage in has supply, t!ds rate is slso not available for new or additional commercial or industrial gas loads other than those new or additional commercial or industris! gas loads which the Company is authorized by the Michigan Public Service Comrnission to attsch to its system from time to time.
Usage Restrictions:
The customer agrees to completely interrupt Ids use of gas at any time upon 8 hours9.259259e-5 days <br />0.00222 hours <br />1.322751e-5 weeks <br />3.044e-6 months <br />' notice by the Company. The customer further agrecs that his annual contracted volume wili be specified by 12 monthly seserve capacities and the monthly reserve espacity for each month in widch the inte:Tuption takes pts:c will be reduced by 1/30th for cach day of interruption. Failure to control the use of gas to witldn this reduced monthly smount will be considered failure to comply with an interruption order.
The number of such inturuptions and the time period of each interruption shall be un!imited. Failure to comply with an interruption order of the Company sha!! constitute sufficient cau'sc for the Company to discontinue gas service.
Monthly Rate:
Service Charge:
$3,000 per customer per month plus,
,)
Commsdity Charge:
$.83 per Mcf for cil Mcf.
Uniauthorir.ed Overrun Gas:
Gas used by a customer under this rate by rer. son of his fsihire to coraply with an interruption order of'the Company shall be considered as unauthorized overrun gas. Such gas shall be billed at the rate of $10.00 per M cu it.
Cost of Cas SoM Adjustment:
The cost of gas sold adjustment shsll consist of an increase or decrease in the charge per Mcf based on the difference betwecn the weighted aversFe monthly cost of gas per Mef delivered into the Company's supply systen, and $7.21 cents pe Mci, sounded to the nearest one hundredth cent per i
l Mcf. Tlis adjustment shall apply to all Mef included in the customer's bill during the billing month followinr, the calendar month in which the gas is delivered into the supply system. To correct for the one month ic. in this procedure between cost incturrence cud billing adjustment, the increase or decsease in the charg = per Mcf as determined churc shall be appropriately incocased or decreased by j
the diffen ner between the "une month la::" oJjustment fdctor applied in the preceding billing month an't the "one.nonth lag" adjustment factor to' be apphed for the immcJiate hilling month.
Tax Adjustment (a) llills shall be inercased within the limits of political subdivisions wIicl(levy special taxes, license fees or res.t.~k ar; inst the Cosapany's propcsty, or its operation, or the psoduction and/o ssic of r.ss, to offset such special charres and thereby prevent other customers faom being compelled to shste such.
i local in 1 esses.
i (b) llills si..dl be incre sed to offset any new or increased specific tax or excisc in med by any governmental authosity upon the Company's production or sale of ras.
(Continued on Sidet No. 9.4)
d Mr.S.C. Ns. 6 - G:s 3~29
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Consume's Power Company (To defere Minimum Charge)
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RATE "F" (Continued from Sheet No. 9.3) lfontidy Rate: (Contd).
Delayed Payment Charge:
A delayed paymern charge of 2% of the total net bill shall be added to any bill which is not paid on or before the duc date shown thereon.
An interim surchargo of 9 78C Interim Surcharge Adiustment:
per Mcf shall be added to the monthly b2.l'1.
Term and Form of Contract:
All service under this rate shall require a minimum term of one year on written contract and shall specify volumes of gas to be reserved for the customer's use on a monthly basis.
Ru!cs and Regulafions:
Service coverned by Company's Standard Rules and Regulations.
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M.P.S.C. No. 6 - Cas
'3 3C'.
Consumers Power Company (To revise Monthiv Rete and truel Adjustment)
GENERAL RESALE SERVICE (CONTRACT RATE "R.1")
Availability:
Open only to customers desiring gas service for resale purposes in accordance with Rule No.12(e) of the Company's Standard Rul:s and Regulations. As a result of a shortage in gas supply, this rate is not available for new or additional commercial or industrial gas loads other than those new or additional commercial or industrial gas loads which the Company is authorized by the Michigan Public Service Commission to attach to its system from time to time.
Monthly Rate:
Service Charge:
$3.50 per customer per month plus, Commodity Charge:
$1.39 per Afeffor all1fcf.
Cost of Cas Sold Adjustment:
The cost of ras sold adjustment shall consist of an increase er decrease in the charge per Mcf based on the difference between the wei:hted average monthly cost of ras per Mct delivered into the t
Company's supply system and 57.24 cents per Mcf, rounded to the nearest one hundredth cent per Mcf. This adjustrnent shall apply to all Mcf included in the custemer's hill during the billin; month following the caicadar month in which the nas is delivered into the supply system. To correct for the one month lag in this procedurc between cust is:curr.=nce and billing adjustatent, the increase or decrease in the charge per Mcf as descrmined above shall be appropriascly incacased or decrecsed by the difference between the "cnc rnoath 1.n" adjusunent factnr applied in the poceeding billing month and the "one anonth lag" adjustment factor to be applied for the iminediate billing anonth.
Tex Adjustment:
i (a) liills shall be increased within the limits of political subdivisions which levy special taxes, license fees 5
l or rentals against the Company's property, or its operation, or the production and/or ss!c of gas, to offset euch special chargee and thereby prevent oil.cr customers from being compelled to sha.re such local increases.
S (b) 11 ills shall be increased to offset any new or increased specific t'ax or excise imposed by any goveanmental authority upon the Company's production or sale of gas.
Deieyed Peysaent Charge:
A delayed payment charne of 2';f, of the total net bill, but not less than s'.20, sha!! be adued to any
~
bill which is not pa.d on or before the due date shown th.ereon.
Interim Surchargo Adjustment:
An interim-surcharge of 12.95C per Mcf shall be added to the monthly bill.
l (Contimied on S,heet No.11.1) i
.M.P,s.Ce Ns. 6 - G,s B-31 Consumers Power Company RATE "R-1" (Continued from Sheet No.11)
Term and Form of Contract:
1 Minimum term of one year on written contract.
Rales and Regulations:
Service coverned by Company's Standard Rules and Regulations.
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M.P.S.C. No. 6 - Cas
- B-32
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Consumers Power Company (To revise Afonthly Itate and Fuel Adjustment) s--.
1 LARGE RESALE SERVICE (CONTRACT RATE "R.2")
Avail:bility:
Open only to customers desiring gas service for resale purposes in accordance with Rule 12(c) of the Company's Standard Rules and Regulations. Durin:t the term of the service contract gas shall not be purchased under any other resale rate in substitution for gas under this rate. As a result of a shortacc in gas supply, this rate is not available for new or additional commercial or industrial gas loads other than tho:;e new o' additional commercial or indust ial gas loads which the Company is authorized by the Michigan Public Scivice Commission to attach to its system from time to time.'
Monthly, Rate:
Service Charge:
$320.00 per customer per month plus,
, Commodity Charge:
$1.00 per hief for all Jfcf.
Cost of Gas Sold Adjustment:
The cost of gas sold adjustment shall consist of an increase or decrease in the char:;c per Mcf based on the difference between the weighted average monthly cost of gas per Mcf deliveret' into the Company's supidy system and 57.24 cents per Mef, sounded to nearest one-hundredth cent per Mcf. This adjustment sh.d' apply to att Mcf included in the cus:o.:ct's bill duririg the billing month following the calendar month in which the gas is delivered into the supply system. To correct for the one month hug in this prac61ure betwcen cost incerr*'nce end billing adjustment. the increase or decrease in the charge s cr Alef as determined above sha!! he appropriately increased or decreased by A.
the difference between the *'onc month lag" adjustment factor applied in the preceding bi!!iig e
month and the "une month leg"adjustnoent factor to 1.c applicJ for the iminedi.rre hi!!ing month.
Tax Adjuttment:
(a) Hi!!s sha!! be increased within the limits of political subdivisions which levy special taxes,licen<e fces or sentals.v.:: inst the Company's property, or its operation, or the production and/or sale of *as, to offset such special charges and therehy prevent other customcrs from being compelled to sharc such local incicases.
(b) Dills rh.$11. be inescased to offset any new or increased specific tax or excise imposed by any gove nmental authority upon the Company's production or sal of gas.
Delayed Paymer.t Charge:
A delayed payment charr.c of 2% of the total net bill shall be. added to any bill which is not paid on or before the duc date shown thereon.
Interim Surcharge Adjustment:
An interim curcharge of 10.67C pet Mcf shall be added to the monthly bill.
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(Contim:c:1 on Sheet Nn.12.1)
m m
e,
e M.P.S.C. Nr. 6 - Cas -
B-33.
. Conumrss PSet Company fTo revise Sinnthlv Hotel COMMERCIAL AND INDUSTRIAL OUTDOOR LIGHTING SERVICE (CONTR ACT R ATE "GL-1")
This Rate Is Not Open To New Business Availability:
t Open to :ny commercial or industrial customer for street or outdoor arca lighting service for any systen-i consistin:: of two or more gas luminaires where the Company h.is an existing gas distribu:;on sy'te:n. A.-
(
a result of a shortage in gas supply, this sale is not avail.ible for new on additional street i
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l
,sra lightint. senice oth:r than new or additional sticct os outdoor arca lighting service which '
, any is I authorized by the Michigan Public Senice Commission to attach to its system from time to l
Naturc of S :vice:
f The customer will furnish the necessary posts, luminahes and fixtures. The Company will install this equipment znd mrie all connections to its r,as dutribotion system. The Company will supply the E.4 the mantics, clean the luminaires and paint all metal parts as needed; all other renew als and i renew maintensnce shall be paid for by the cu:tomer.
g Montidy Rate:
o 3 6.50 per luminaise hadnr. a sated consumption of 2.5 cubic feet or less per hour.
?
5 8.50 per luminaire h Wng a rated consumption of more il:an 2.5 cubic feet but not more than 4.5 cubic feet per hour.
310.50 per hu.inaire having a rated consumption of more than 4.5 cubic feet but not moie than 6.5 B cubic feet per hour, g
i For lumin:ises having a rated consumption of more than 6.5 cubic feet per he.r the rnonth:.
charge shall bc 510.50 per luminaire plus 51.30 for c ;h addhien:1 cubic foot per hour er fncu:e theseof of sated consumption in excen of 6.5 cubic fut per hout.
c e
Tax Adjustmer.t:
(a) Bills shall be ine:cated within the lirr.it< of political subdivisiont which levy special tr.ves, license rm.
or sentals arainst the Con pany's prvsrty, or its operations. or the productma and/or >31e of r::s. to offset such special chaines and thereby pievent other customers from being compclied to sl.:.:e sort local inerenses.
(b) liillr. shall be inercased to offset any new or increased f.inceific tax or excise imp + ed by a.s gowrnmental authority upon the Com!.at'y's pinduction os s:.lc of gas.
j Delayed Payment Charce:
f A delayed psyment charge of 27c of the total net bill, but not less than 5.20 shall b.cded to u.-
bill which is no: paid on or before the clue date shown thereon.
fiterim s'lytre akke of 400 inrr In teritrt F.urcharg" A
' us t mara t. : d 'Aint.o
$. De nuue Canon:t:
luminaire sha ac montn i.
Miniinem term of three years on waillen contract rnd ye:ir to year there;effen until terminated by mutual cornent or upon thace inunths' written notice given by either party.
Special Teims and Cond!::ous:
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The Company resene: the rir.ht -to mal:e speci:1 contraciu:1 airansments as to term or duratien tu cont act, termination changes, contributions in aid of'eqnstruction, monthly chaft;es or other sr.cs.a' consideration when the custunnes sequesis service, equipment or facili'ics not noimally provided under this rate.
Rules and Itr;.idations:
Scarice governed by the Compariy's Stalidasd Rules and Regulations.
J
'llI
(~1 l
- yp STATE O F M I CH I GAN BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION in the matter of the application
)
of CONSUMERS POWER COMPANY for.
)
Case No. U-4717 authority to increase its rates
)
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for the sale of gas. -
)
)
DISSENTING OPINION OF COMMISSIONER WILLIAM R. RALLS (Submitted on June 2,1975 in opposition to the Opinion and Order issued on the same date)
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The question in this case is whether Consumers Power Company should collect an additional $3.8 million from its naturai gas customers during the months of June, July, and Augut t, or whether the Public Service Commission should instead consider 'the major issues in this proceeding first---the proper rate of return to be earned by shareholders, the prudence of expenditures at the Marysville
. reforming plant, the proper balance between commercial and industrial rates and residential rates---and then make a binding final decision resolving the entire matter.
By statute and established Commission precedent extraordinary circum-stances must exist to justify such partial and immediate rate increases; no such situation has been proven in this case.
I therefore rcJect the Company's re-quest for interim relief, and suggest instead that the Commission proceed at once to a final determination of this matter.
Requirements for Interim Rat'e increases i
in several cases before the Commission specific criteria have been set forth which particularize what is meant by " extraordinary circumstances."
(See, Re Michigan Consolidated Gas. Company, Case No. U-3740).
To be eligibic for 8
p
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B-35
' interim r$ta rallof, tha utility mus't first establi~ h sn overall rsvanue
~
s deficiency, and in addition must prove thati cne or more of the following con-ditions exist:
(1)
Inability to arrange debt financing without improved revenues.
(2)
Distinctive and sudden decline in revenues.
(3)
Evidence to indicate that deferral of partial rate relief until a final order can be issued would cause unreasonabic and harmful loss of revenue to the Appilcant utility.
(4)
Reasonable grounds for the Commission to believe that denial of the motion would cause irreparable harm to the Applicant utility Consumers Power Company argues that conditions (1), (3), and (4) of the criteria for interim relief have been met in this.c.ase---by reference to the total financial picture of the combined electric and gas operations of the Com-pany.
Yet this is a' rate proceeding strictly limited to the natural gas opera-tions of Consumers, and that is the only subject which is germane.
Evaluation ^,
f of the Company's argumentation in the light of the proper scope of the proceeding
/
reveals that in fact none of the conditions for the grant of interim / relief f
have been met.
Analysis of Argument for Interim Relief The only evidence relating to the first requirement, inability to arrange debt financing without improved revenues, is derived from the total Company opera-tions, and relates overwhelmingly to the financing requirements of the total Company'.
Consumers Power states that it will require a total of $270 million in outside financing---but on!" $30 million of this will be expended for riatural gas activities.
There is no evidence that even this $30 million must be financed or Page 2 i
I U-4717
-- - l
f_
')
e B-36 By its own expert testimony it will require '
expended in the next three months.
cpproximatel'y a year of greatly improved total revenues to obtain needed im-
. proved marketability of its securities, but th s is improved total Company i
revenues to market $270 million of securities.
There is thus no convincing
~
evidence of Inability to arrange financing of gas operations from improved gas revenues.
The requirement is not met.
There is no evidence that deferral of $3.8 million until a final order can be issued in approximately three months would cause unreasonabic and harmful loss of revenue to the Applicant utility.
This sum, approximately 13% of the interim increase granted representing the Company's June, July, and August sales No testi-is less than 1% of the annual gas revenues of Consumers Power Company.
mony was introduced that such a sum was of essential importance to the Company, and it is difficult to conceive of the essential nature of less than 1% of the total gas revenues for a period of three months.
I conclude that proceeding to
/
a final decision in this case is the reasonable course of action, and would not in fact cause such a loss of revenue as to be demonstrably harmful to the Company.
It thus follows that in my judgment no showing has been made that denial of N
thhs motion would cause irreparabic harm to the Applicant.
No convincing testi-mony supporting such a conclusion was submitted, nor was a persuasive argument made by counsel to support such a Judgment.
None of the conditions for interim relief having been met, the motion must be denied.
l The Proper Use of interim Relief I have approved an interim increase in the case of a natural gas utility (Case No. 4331).
In that regard, it must be remembered that the income of natural gas utilities is highly seasonal, and if rates are not put into effect prior to Page 3 U-4717
_m
-m.
m
.Q J.
~B-37
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the winter heating season, a utility can lose for an entire year mos.t of the
~
benefits of 'a final rate increase.
Obvious'iy, the same situation does not exist in this case.
Its summer gas sales are small, and as I have shown, the benefits of the interim increase granted by the majority will be minimal.
In contrast to the minimal benefit to Consumers Power of the increase granted by the majority today, the absence of any showing of extraordinary cir-cumstances, and the lack of similarity between this case and other cases in which interim increases were approved there are several compeliins independent reasons for denying interim rate relief to Consumers Power Company.
B,y acting on an interim basis the majority foregoes the full, complete, and reasoned consideration of all the issues raised by the application.
The majority's judgment is made without the full evidence of al1~ factors in the record; without a brief being filed by the Commission staff; without briefs by the parties; and, finally, without a Proposal for Decision by the Administrative Law Judge and exceptions to the Proposal by the parties and staff.
To forego those normal and time proven processes should require a far greater showing of exceptional circumstances than Consumers Power has made.
By acting prematurely the majority impairs the right of the customers to the present use of their money.
Also, the premature decision could interfere with the efforts of the Com-mission to insure that any final rate increase is equitably allocated among the various classes of customers and types of service', since today's rate increase allocations are not based on the determination of the amount or ' allocation of a
. final rate increase.
As the Commission increasingly follows the path of approving interim rate increases, quickly followed by fina) rate decisions, the public can only be Page 4 U-h717
a 3
,nt
-confused.
In the space of Just three months the. basis for computing gas b111s 4 will change twice, and there will be two public announcements of Commission decisions.affecting gas rates.
These frequent and repeated changes can only serve to heighten public confusion about the regulatory process.
The use of, Interim rate relief on a regular basis by the Commission is also- '
not in the best interest of the utilities.
Its frequent use reduces the impera-tive of deciding cases within nine months, as required by statute.
Perhaps more importantly, the use of Interim rate relief serves to mask the need for funda-mental reform of the entire rate-making process, so that final decisions can be made earlier and more accurately.
I have called for new mechanisms to improve the quality of the deliberations of this Commission.
Interim rate relief, can be only a stop gap maneuver to paper-over inherent deficiencies'in the procedures for determining reasonable and Just rates.
It is possible to have both reasoned and full consideration of application for rate relief, and early and fair decisions.
But, regular reliance on interim decisions is not the way to achieve those objectives.
Conclusion in short, no interest is well served by the grant of interim rate relief to Cor.sumers Power Company.
The public is not served by a decision that exacts additional charges without full consideration of the record.
The Company receives a minimal present benefit, but the rrice it pays is obfuscation of the need for fundamental regulatory reform.
And the Commission, for its part, deprives itself of the opportunity to make a careful judgment of the issues.
A.b =-
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June 2,.1975 klilliam R. Ralls 'f/r 1.ansing, Michigan Commissioner
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Page'S-U-4717
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m, Appendix C STATEMENT OF SOURCE OF FUNDS FOR GROSS PROPERTY ADDITIONS 3 Months Ended Source of Funds for Gross Property Additions June 30, 1975 Funds Generated From Operations:
Net Income After Dividends on Preferred and Preference Stock
$13,591,742 Principal Noncash Items Depreciation and Amorti::ation Per Statement of Incme 20,098,776 Charged to other Accounts 1,130,033 Deferred Income Taxes, Net 6,296,919 Investment Tax Credit, Net 13,805,996 (5,751,818))
785 Allowance for Funds Used During Construction (1,934, Undistributed Earnings of Subsidiaries
$ 47,236,e63 Less Dividends Declared on Comon Stock
$ 13,184,287 Retirement of Preferred Stock.
400,000
$ 33,652,576 Funds Obtained From New' Financing:
Issuance of Preference Stock
$ 50,000,000 Net Proceeds From Installment Sales Contracts Payable 757,144 Increase in Other Long-Term Debt 4,922 Decrease in Notes Payable (98,100,000)
$(47,3373934)
Other Sources (Uses) of Funds:
Change in Het Current Assets and Current Liabilities (Excluding Obligations Expected To Be Refinanced)
Accrued Utility Revenue
$ 31,658,798 Accounts Receivable 36,028,586 Materials and Supplies (4,422,505)
Gas in Underground Storage (27,731,555)
Prepaid Real and Personal Property Taxes 6,108,457 Bankers Acceptance Drafts 20,000,000 Current Maturities and Sinking Fund - LTD (8,409,643)
Accounts Payable (16,021,229)
Accrued Taxes (5,888,983)
Accrued Interest (2,032,162)
Other 4,637,236
$ 33,927,002 Sale of Land and Structures 26,365,956 Other, Net 1,051,806
$ 61,344,764 Total Funds for Construction From Above Sources
$ 47,659,406 Allowance for Funds Used During Construction 5,751,785 Cross Property Additions
$ 53.hll,191
NRC DL RIBUTION FOR PART 50 DOCKET sTERIAL (TEMPORARY FORM) hI9 8 f
CONTROL NO:
p I
FILE:
FROM: Consumers Power Company DATE OF COC DATE REC'D LTR.
TWX RPT OTHER
$1f E"
8-18-75 8-21-75 XXX u
ORIG CC OTHER SENT NRC PDR TO:
SENT LOCAL PDR one signed Mr Giambusso rs t
'O:
y^320 CLASS UNCLASS PROPINFO INPUT NO CYS REC'D L 50-0 1
XX:CC{X ENCLOSURES:
DESCRIPTION:
Ltr re our 9-13-75 ler...trans the follow:
Quarterly financial report for the period covering the second quarter of 1975.......
(40 cys eeni rec'd)
-r
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PLANT N AME:
Midland 1 & 2
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FOR ACTION /INFORMATION 8-22-75 chf ZIEMANN (L)
REG AN (E)
BUTLER (L)
JCHWENCER (L)
W/ Copies W/2 Copies W/ Copies W/ Copies CLARK (L)
STOLZ (L)
DICKER (E)
LEAR (L)
W/ Copies W/ Copies W/ Copies W/ Copies PARR (L)
VASSALLO (L)
KNIGHTON (E)
SPIES W/ Copies
.W/ Copies W/ Copies W/ Copies KNIEL (L)
PURPLE (L)
YOUNGBLOOD (E)
LPM W/ Copies W/ Copies W/ Copies W/ Copies INTERNAL DISTRIBUTION
,A REG FI TECH REVIEW DENTON LIC ASST A/T IN D B R AITM AN e R SCHROEDER GRIMES R. DIGGS (L) f
/OGC, ROOM P 506A MACCARY GAMMILL H. GEARIN (L)
SALTZMAN f. GOULBOURNE (L) jME LTZ GOSSICK/ STAFF KNIGHT KASTNER E
P. KREUTZER (E)
CASE PAWLICKI BALLARD GIAMBUSSO SHAO SPANGLER J. LEE (L)
PLANS.
MCDONALD BOYD STELLO M. RUSHER 00K(L)
HOUSTON ENVIRO S. REED (E)
CHAPMAN
' MOORE (L)
DEYOUNG (L)
NOVAK MULLER M. SERVICE (L)
DUBE (Ltr)
ROSS DICKER S. SHEPPARD (L)
E. COUPE f.SKOVHOLT (L)
PETERSON GOLLER (L) (Ltr)
IPPOLITO KNIGHTON M. SLATER (E)
P. CO LLINS TEDESCO YOUNGBLOOD H. SMITH (L)
HARTFIELD (2)
KLECKER DENISE J. COLLINS REGAN S. TEETS (L)
REG OPR LAINAS PROJECT LQR G. WI LLI AMS (E)
EISENHUT WI G NTON
/ FILE & REGION (2)
BENAROYA j /L r a c /t c.
V. WILSON (L) 0V C#j MIPC VOLLMER HARLE$S R. INGRAM (L) j
^
M. DUNCAN (E) u -
EXTERN AL DISTRIBUTION
/.D/; M %
l Al 1 - LOCAL PDR_ $isbl&n dht)(2)tt0} - N ATION AL LABS Aljk 1 - PD R-S AN/LA/NY
/7 -TIC (ABERNATHY)j
- W. PENNINGTON, Rm E.201 GT
)1 -- G. ULRIKSON ORNL 1
- BROOKHAVEN NAT LAB
/ - NSIC (BUCHANAN) 1 1 - ASLB e.
1 - CONSU LTANTS 1 - Newton Anderson NEWMARK/BLUME/AGBABIAN
$D ls. b r 00 t]
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